First I look at the technology and what purpose it will serve to a customer. Each coin has different features so in my opinion it is best to set up your portfolio in a manner that accommodates all purposes. There are other considerations including supply and the market cap, which will allow you to predict the growth of each coin depending on its supply and demand. I will tell you my portfolio and the reasons I chose these coins:

1. BTC (large transactions) - first to market, and will continue to hold the throne because it is the most widely accepted. You need this coin most of the time to buy other altcoins.

2. LTC (smaller transactions) - This coin is intended to work hand in hand with Bitcoin and the creator Charlie Lee has announced that many exciting features will be coming soon, and the possibility of many online merchants accepting this as a form of payment.

3. XSPEC (privacy) - I think with an ever increasing supply of internet connected devices and mass accumulation of data privacy will always be a concern. People want to protect their privacy and I think this coin has the best tech to do it. At its current supply/market cap, I think it has ENORMOUS room to grow especially considering the features that will supplement an already promising coin.

4. IOTA (device to device transactions) - Picture your car having a balance, that automatically sends payments for parking, or allows you to smoothly pay for gas at a gas station without having to pull out any credit cards or cash. Now imagine every internet connected device you have containing a balance that can communicate with other connected devices. I'm really excited for this one, but this is really long term.

5. XRP (banking) - This coin will for sure dominate any banking systems. I'm not too excited on the concept since it is centralized and the ridiculous supply doesn't allow for any huge growth, but I like having a diverse portfolio so I picked this for banks.